The Monthly Regime Report — July 2026
A composite of 15 signals across growth, labour, rates, credit, breadth and volatility. The rules — not my mood — call the regime.
The headline: the composite regime score slipped to +6 this month, down from +7 on 1 July. Eight signals bullish, five neutral, two bearish. The framework stays BULLISH — but the two flips underneath are the interesting part, because they moved in opposite directions.
Two flips this month
1. Labour flipped NEUTRAL → BEARISH
June non-farm payrolls came in at +57k against ~115k consensus — tripping my pre-set “<75k = downgrade” trigger. April and May were revised down a combined −74k, and the 4.2% unemployment rate flatters the picture: participation fell to 61.5%, lowest since March 2021. Claims at 215k read as a hiring freeze, not a firing cycle — but the rule fired, so labour goes bearish.
2. Rates improved BEARISH → NEUTRAL
The same weak print pared 2026 hike odds to about 42% on CME FedWatch, and crude’s −24% month (WTI below $70 first time since February) sets up a friendlier H2 disinflation path. The 10-year sits at 4.49%. Lower tightening risk plus cheaper energy lifts rates from bearish to neutral.
And a quieter one: ATR BULLISH → NEUTRAL
Realised volatility is now ~1.5% a day after June’s chop — up ~50%. The risk book responds mechanically: wider stops, smaller size.
What else the books flagged
| Signal | Read |
|---|---|
| ISM Services (June) | 54.0 — Employment back above 50 for the first time in four months |
| Industrials (XLI) | New 52-week high |
| Financials (XLF) | RSI 76 into bank earnings — stretched |
| GS / JPM spread | 3.12 (Wk 1, +2.4% vs entry) — below its 3.22 45-day mean |
| Korea (EWY) | +8.3% on the month, won firming |
The near-term tests
Two events move the score next: CPI on 14 July, and GS / JPM Q2 earnings around 14–15 July. A hot CPI would undo the rates upgrade; soft bank guidance into that stretched XLF read is the obvious breadth risk. The framework will tell me which way it went — I just have to let it.
Not investment advice. Mechanical output of a personal framework, shared to show process. Data via public releases (BLS, ISM, CME FedWatch); market data via TradingView and Bigdata.com.